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Platts: Asia Spot LNG Prices for July Delivery Fell 0.6% on Scarce Demand

On a Year-Over-Year Basis, July Prices Were Down 19.5% Versus 2012

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SINGAPORE, June 18, 2013 /PRNewswire/ -- Prices of liquefied natural gas (LNG) for July delivery to Asia fell 0.6% to $14.485 per million British thermal units (/MMBtu), as spot demand remained scarce even as the region entered summer peak demand season, according to the latest monthly report on Platts Japan/Korea Marker (JKM) for month-ahead delivery. The monthly average of Platts JKM for delivery in July was assessed over the period of May 16 to June 14.

This decline followed a 5.8% drop in prices for June delivery and marked the fourth consecutive month-over-month drop in spot LNG prices. Spot demand showed little signs of recovering, as higher-than-average May temperatures in Japan and South Korea failed to draw buyers back to the market. Ample stockpiles and increased reliance on inventory from long-term contracts covered requirements and continued to suppress spot demand.

"As North Asia entered the summer strong-demand season, tightness of supply due to the closure of Norway's Hammerfest LNG and a force majeure on gas supplies feeding into Nigeria's Bonny terminal did little to buoy prices and buyers remained bearish on spot cargo prices," said Sarah Cottle, global editorial director, power, for Platts, a leading global energy, petrochemicals and metals information provider and a premier source of benchmark price references. "Also, despite the warmer-than-average temperatures in Japan and Korea, buyers in those regions remained confident that pre-existing long-term supply contracts would cover the bulk of their summer requirements."

On a year-over-year basis, the July Platts JKM was down 19.5% from the 2012 July-delivery level of $18.000/MMBtu.

The month-ahead spot prices were mixed for thermal coal and fuel oil, which Asian utilities can use as substitutes for LNG. Thermal coal prices dropped 0.1%, while fuel oil rose 0.5%, respectively, according the Platts' latest month-over-month data for July.

Platts Spot JKM and Substitute Fuel Prices (Monthly Averages)*


July-13

July-12

June-13

Year-Over-Year
Change %

Month-Over-Month
Change %

JKM ($/MMBtu)

14.485

18.000

14.565

-19.5

-0.6

Qinhuangdao coal ($/MMBtu)

4.03

5.18

4.04

-22.1

-0.1

180 CST fuel oil ($/MMBtu)

15.73

16.17

15.65

-2.7

0.5

Source: Platts

 

*Referred to as month-ahead, the figures in the table are monthly averages of daily values assessed by Platts from
May 16th to June 14th.  The Platts JKM rolls on the 16th of each calendar month

 

The Platts JKM is an assessment of LNG prices for spot cargoes delivered to Japan and South Korea, based on the most recent trades and/or bids and offers from buyers and sellers in the open market prevailing at the close of the trading day. The monthly JKM assessments are month-ahead delivered prices and are an average of the daily JKM price assessments reported by Platts.

For more information on natural gas or the methodology used by Platts in its power assessment processes, visit the Platts website www.platts.com.

Platts' monthly reports on Asia LNG prices and market developments are typically published shortly after the 15th of each month.

About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals, metals and agriculture information and a premier source of benchmark prices for the physical and futures markets. Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency. Customers in more than 150 countries benefit from Platts' coverage of the biofuels, carbon emissions, coalelectricityoil, natural gas, nuclear powermetals, petrochemical, shipping and sugar markets. A division of The McGraw-Hill Companies (NYSE: MHFI), Platts is headquartered in New York with approximately 900 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.

About The McGraw-Hill Companies: McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power & Associates, McGraw Hill Construction and Aviation Week. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com.

SOURCE Platts



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